Manila: The Bureau of Internal Revenue (BIR) has issued a circular aimed at simplifying the process for closing businesses and cancelling tax registration. This initiative is part of the implementation of the Ease of Paying Taxes Act.
According to Philippines News Agency, Revenue Memorandum Circular No. 47-2026, issued on May 19, allows businesses that have ceased operations to apply for closure or cancellation of their registration either manually or electronically through their respective Revenue District Office. This reform is intended to support businesses through every stage of their life cycle, as stated by BIR Commissioner Charlito Martin Mendoza.
Applicants are required to submit an application form, surrender original BIR registration documents, permits, and a list of ending inventory of goods and supplies. VAT-registered taxpayers must also include capital goods and unused invoices. The submission of complete documentary requirements will halt the accrual of penalties for non-filing of tax returns.
The BIR has also stated that upon submission of the necessary documents, the taxpayer's registered form types will be classified under 'deregistered' status to prevent further accumulation of open cases. However, the submission does not exempt the taxpayer from potential audits to determine any outstanding tax liabilities.
Micro taxpayers, defined as those with gross sales not exceeding PHP3 million or assets not exceeding PHP8 million, will not be subjected to mandatory audits for closure or cancellation of business registration. Tax clearances will be issued within three working days upon submission of complete documents for those without open cases. For those with open cases, clearance will be given after the payment of outstanding liabilities.
The BIR has reminded taxpayers that failure to submit the required documents for business closure will result in continued liability for tax obligations. This move aligns with President Ferdinand R. Marcos Jr.'s directive to enhance government services and Finance Secretary Frederick D. Go's efforts to create a more investor-friendly tax administration environment.
